As a citizen of Canada living in the UK your worldwide income is taxable under the Canadian tax system. It is essential that you are aware of your tax filing obligations as to avoid penalties and paying more tax than you should be.

Lower tax rates

Many countries around the world- such as the UK, have a lower individual income tax rate to Canada. Therefore it may be an option to sever your residency ties to Canada for tax purposes, as to not face Canadian tax. You can sever your Canadian residency through a Canadian Departure tax return.

It is important that before you make that decision, you first determine if you are even in a position to be able to sever residency and whether it makes sense in your situation. Tax residency does not affect your citizenship or legal residency status. It is specific to tax.

How to file your taxes?

If you have left Canada you will have to first establish your residency status to work out what your Canadian tax filing obligations are.

You will be required to file a tax return the year you leave Canada if you have a balance owed or you’d like to receive a tax refund. During the tax year you leave, you should complete the general income tax and benefit package for your province or territory of residence on the day you emigrated from Canada. Your tax-filing deadline will remain the same. You will have to file before April 30th, or if you have a business in Canada you will have until June 15th to file your tax return.

On your return you must report your worldwide income earned while you were a Canadian resident. After you are no longer recognised Canadian resident, you will only have to pay income tax on income earned in Canada.

YOU ARE STILL REQUIRED TO FILE A CANADIAN TAX RETURN IF THE TAX RATE OF YOUR LOCATION IS HIGHER

If the tax rate is higher in the country you are living/travelling/working, you are still required to file a Canadian tax return. You will not be required to pay any tax to Canada. However you must still disclose the amount of income you earned and the amount of tax you paid.

Non-residents of Canada are still subject to taxation if they make income within Canada.

Non-residents are still required to pay tax if they earn income in Canada. The income is generally taxed at a flat rate.